More Rough Roads as RA Has No Funds for Rehabilitation & Maintenance
Since April this year, the Malawi Energy Regulatory Authority MERA quietly reduced the Roads Maintenance Fuel Levy from 11 percent to 7 percent in a bid to cover anticipation for a fuel hike.
The thinking at the time was that the reduction would only be for three months but it continues to date and the effect is that Roads Authority (RA) cannot raise enough funds for roads maintenance.
Board chair for Roads Fund Administration, Joel Ching’ani, confirmed the development to us saying the turn of events has affected their ability to offer quality road maintenance works now.
According to Ching’ani 300 contractors were already identified for maintenance works valued at MK8.4 billion Kwacha but their scope of work has been reduced to cost the available MK4.2 billion Kwacha.
While the Roads Authority is worried about the scenario, MERA and Treasury are pushing responsibility to each other on who has the last say on rectifying the anomaly.
Fitina Khonje speaks for MERA. She says the decision was made by all stakeholders including RA with the aim to manage fuel pricing without crippling road maintenance works in the country.
But the decision to lift the reduction, she says, rests with Treasury.
"We only follow what we are directed by Treasury and any decision now onwards will await their nod," said Khonje.
Ironically, Finance Spokesperson Williams Banda tells us their understanding is that it is MERA that has been mandated to lift the reduction and revert to the original for RA to collect levy as before.
Banda, nevertheless, says Treasury has not received any complaint from Roads Authority on the effect that the levy reduction is having on plans to rehabilitate roads in the country.
"Our office is open if need be for some more resources for maintenance of roads by RA," said Banda.
It is estimated that road maintenance in Malawi requires about $50 million (K40 billion) annually. These finances derive from the road maintenance fuel levy and NOT the annual budget.